Nasdaq-listed chip stock Marvell Technology (NASDAQ: MRVL) has shot up recently. The main reason it has soared is that Nvidia boss Jensen Huang said that this company could potentially be worth $1trn one day (its current market cap is about $245bn).
Should I buy the stock on the back of Huang’s bullish stance? Let’s discuss.
What exactly did Huang say?
During a keynote appearance at the Computex 2026 trade show in Taipei on 2 June, Huang emphasised that Marvell’s networking and connectivity chips are going to be essential for handling AI workloads as data centres scale up. His view is that high-speed connectivity is going to be a critical bottleneck and that Marvell is uniquely positioned to solve the challenge.
It’s worth pointing out that his endorsement follows a strategic partnership between the two companies announced in March. Here, Nvidia invested $2bn in Marvell to integrate its technology into the Nvidia NVLink Fusion ecosystem.
Time to take a closer look at Marvell?
Now, up to now, I haven’t followed Marvell Technology that closely. One reason for this is that the company has struggled with profitability in recent years and I tend to focus on (and invest in) tech companies that are profitable.
Given Huang’s comments, however, I feel that I need to take a closer look at it. After all, the Nvidia boss has had an incredible level of success with AI to date (and made me a lot of money in the process).
Huge growth
Looking at the growth here, it’s certainly impressive. Last financial year (ended 31 January), revenue rose 41% to $8.2bn.
This financial year, analysts forecast top-line growth of another 40%. Next year, they anticipate growth of 44%.
What’s fuelling the growth?
As for what’s driving this growth, it’s two things.
First, there are Marvell’s custom AI chips. Like Broadcom (which I have shares in), Marvell works closely with AI giants to design custom application-specific integrated circuits (ASICs) designed to run specific internal artificial intelligence workloads more efficiently than standard processors.
Second, there are its optical interconnects and networking solutions that move data quickly. Here, Marvell is a market leader in chips that convert electrical signals from computers into light signals to shoot data through fibre-optic cables at blazing speeds (enabling massive clusters of GPUs to function as single, unified entities with minimal latency).
Rising profits
But it’s not just a growth story today. Because this company is now profitable.
Last financial year, net profit was $2.7bn. This financial year, analysts are looking for $3.6bn, that is, 33% growth.
This profitability means that the company now has a price-to-earnings (P/E) ratio. It stands at about 70, looking at the earnings per share (EPS) forecast of $4 for this year.
That’s pretty high (for reference, Nvidia is on 23). However, the ratio falls to 46 when we use next year’s EPS forecast.
Should I buy?
Given the high valuation, I’m not going to buy Marvell shares today. The way I see it, the valuation doesn’t leave any room for error (like a temporary slowdown in growth or an earnings miss).
This AI stock is definitely on my watchlist though given Huang’s comments. If it has a decent pullback, I may snap it up for my portfolio.
Should you invest £5,000 in Marvell Technology right now?
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Edward Sheldon owns shares in Nvidia and Broadcom.
